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Discussion about corporate social responsibility (CSR) focus on the goodness of CSR for its own sake, but other discussions have at least hypothesized that CSR will bring about benefits to the bottom line. Some of the logic behind this is that companies with a high level of social responsibility are more likely to win business from consumers than companies that do not, and more likely to perform better, in particular where their CSR activities help to breed a better and more loyal workforce.
It can be difficult to draw conclusions with respect to the impact that CSR programs have on profits, for a couple of reasons. The first is that profits vary significantly from one year to the next anyway. The second is that there are a large number of variables that contribute to profits, making it impossible to isolate CSR as an independent variable. Third is that CSR varies with each company. This inconsistency makes it even more difficult to determine what the actual impact on profits that corporate social responsibility activities have.
However, some scholars have started to build out a framework that helps to understand the impact that CSR has on business. Wilburn and Wilburn (2014) examine B corporations. This structure is legal in a number of different jurisdictions in the US and Canada, and...…they are not the only ones influenced by what the organization does. The shareholder approach, especially the rather austere version put forth by Milton Friedman (1970) to counteract arguments in favor of corporate social responsibility, are narrow in their scope, failing to recognize the breadth of activities and outcomes corporations deliver.
Gibson (2012) does make a good point that the environment as a stakeholder has some unique issues, and I feel that it is a strong contribution to the discussion to understand and work through some of those issues in order to find ways to better measure CSR effectiveness. I definitely reject the notion of a single bottom line, and would put forth that…
References
Friedman, M. (1970). The social responsibility of business is to increases its profits. New York Times Magazine. Retrieved June 28, 2018 from https://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Gibson, K. (2012). Stakeholders and sustainability: An evolving theory. Journal of Business Ethics. Vol. 109 (2012) 15-25.
Wilburn, K. & Wilburn, R. (2014) The double bottom line: profit and social benefit. Business Horizons. Vol. 57 (1) 11-20.
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